DNB Bank ASA

Hello, and welcome to the DNB Q3 conference call. My name is George. I'll be your coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your lines will be in the listen-only mode. However, you'll have the opportunity to ask questions towards the end of the presentation, and this can be done by pressing star 1 on your tablet or keypad to answer your question. If you require assistance at any point, please press star 0, and you will be connected to an operator. I can call out your host, Ms. Mitra Hagen, head of IR to be at this conference. Please go ahead, Mitra.

Thank you. Hi, everyone, and welcome to our third quarter 26 analyst call. I am Mitra Hagen-Megoy, head of investor relations. With me today, I have our CEO, Kjerstin Braathen, CFO Rasmus Figenschou, EVP of personal banking, Maria Loevold, EVP of DNB Carnegie, Alexander Opstad, EVP of Risk Management, Elinus Gramstad, and my colleague in IR, Anna Engebrigtsen. We will begin with a brief recap from Kjerstin on the key highlights of today's results before opening the floor for Q&A.

Thank you Mitra and thanks for spending an hour with us today. I'll repeat a couple of the highlights from this morning's webcast and start with a few words on the Norwegian economy which continues to show its resilience this quarter. And as you may remember we had a rate hike in the springtime where we repriced and most of the impact of this repricing you can see in today's numbers. Then again there was an additional rate hike by the central bank in September with an additional announced repricing which will take effect sometime towards the end of November. But that is on the backdrop of an inflation that has come down but is proving stickier than expected to Get down to the completely to the two percent level which is targeted by the by the central bank and the key policy rate in Norway is now four and a half percent. Beyond that nothing really changes to report in the economy still resilient growth of 1.1 percent this year unemployment around the two percent level and households and and many other industries that show resilience and strong performance. This plays into our numbers and we believe that we put down a strong set of results today for our third quarter earnings. Return on equity comes in at 14.5% which is above our minimum targeted return of 14%. We feel it makes sense also to show you the adjusted number If we take out our share of profits from the Luminar transaction, which was announced this quarter, which is then the return of 15,500 for the quarter. This is the result of profitable growth across the business areas. NII is up compared to the previous quarter by 2.5%. A strong point this quarter is net commission and fees, which is up by 14.6% from the same quarter in previous years, where again we highlight investment banking and asset management as the two strong growth drivers in the fee and commission category. Investment banking is up by 38% compared to the same quarter last year, and asset management 11 and a half percentage points. Third quarter is usually a somewhat slower quarter on the fee side, so it's worth pointing out that the numbers are also impacted by certain larger transactions that were more or less done in the second quarter, but very much towards the end and closed early into the third quarter and reflected in these numbers. Portfolios well diversified, costs are down 355 million, both reflecting a reduction in fixed salaries as well as variable salaries, but again, a higher level of variable salaries compared to the same quarter last year, reflecting that this has been an active third quarter for us. Portfolio's robust impairments come in at 529 million, nothing to report of in terms of industry sector specific news nor migration in the portfolio. It remains robust and well diversified. And then lastly, maybe reiterate our capital, which is very strong, 17.3%, 100 basis points above the required unexpected level of the FSA. and this core equity is also after deducting the 30 basis points that has been deducted to account for the share buyback of 75 basis points of the share that were announced earlier today. So with that, I think we're ready to open up for your questions.